Kevin's Weekly Health Tech Reads 6/7

Steward docs buy it back from Cerberus, a podcast on the economics of health systems, a look at ACA enrollment, McKinsey thinks digital health spend could hit $250 billion, & more

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News:

  • A group of Steward Healthcare physicians, led by its CEO and founder, have purchased themselves back from Cerberus. Only a few months ago Steward was in the news for demanding a $40 million bailout from the state of Pennsylvania to keep one of its hospitals doors open during the COVID-19 peak. Given the timing here it would seem like the physician leadership had some issues with the way Cerberus was managing the tradeoffs of financials vs. patient care. With all the articles from last week about the challenges of private equity owning care delivery, will be curious to watch if this move leads to any meaningful changes for how Steward is led. Link.
  • Seema Verma announced this week that CMS’s Center for Medicare and Medicaid Innovation (CMMI) is making changes to CMMI value based payment models in order to provide more flexibility for providers. The changes announced include a one year extension of the Next Generation ACO model and a start date of April 1, 2021 for the Direct Contracting model. Link.
  • Intermountain Health spin-out Castell announced a hospital at home offering this week. Seems like a bit of a pivot from the initial concept when Castell launched last year to scale Intermountain’s ‘reimagined primary care’ model to support external clinicians in implementing value based care models. Although I can see the narrative for how this capability would support Castell’s value based offering. Similar to the VillageMD model, you offer services to providers so they can focus on providing care in clinic and have the right support services to perform well in value based contracts. Link.
  • PlushCare raised $23 million for their virtual primary care model with cuddly teddy bears who deliver care. Ok, ok… just kidding on the teddy bear part. The article has some interesting data points on the company. They’ve taken a D2C approach, charging members $14.99 per month + visit fees, and have managed to attract over 100,000 paying customers according. That seems like a really impressive number to get to via D2C channels. It’s not easy to convince people to pay $14.99 a month out of their own pocket just as an access fee for docs. Link.
  • Amwell just confidentially filed for an IPO that’s expected to price in September as investors continue to be very bullish on the telehealth market. Link.
  • Maven purchased (acqui-hired?) Bright Parenting, makers of a parenting app, which will be integrated into Maven’s pediatrics / parenting programs. Seems like a logical product extension for Maven to expand into. Link.
  • Sharecare purchased Mindsciences, a behavioral health platform. Link.

Opinions:

  • In this weeks installment of depressing news about rural healthcare in this country, this article looks at a hospital in rural Oklahoma that closed after a group of private investors who came in to turn the hospital around ran out of cash. It’s a really good, and equally tough read about the predicament rural hospitals are in. This case has ended with the city suing the investors for fraud and the investors countersuing for $1 million of unpaid management fees. It’s hard to see how we avoid a wave of crappy outcomes like this across the country given the financial dynamics at play. Rural hospitals are teetering on the verge of bankruptcy, but rural cities want to keep them for jobs and such, so city leaders are willing to make deals to keep them alive, they make a deal with some folks who see an opportunity to make a buck, the city then comes to find it got the short end of the deal and the hospital inevitably still ends up going under. Link.
  • This podcast does an excellent job laying bare the challenging economics of healthcare in this country today, and the role that employers, health systems, and insurers will all need to play in solving the challenges ahead. If you’re confused about the dynamics of how health systems can be facing financial challenges in the midst of a pandemic - this podcast is for you. It’s one of the most digestible breakdowns of health system financial models I’ve heard. The points made about the health systems’ lack of understanding of their own costs and the challenges that presents are particularly worthwhile. Worth a listen. Link.
  • It seems like the federal government is starting to share more thinking on whats going to happen with telehealth reimbursement moving forward, as an advisor to HHS shared some thoughts this week, talking about how to ensure that there isn’t a hard stop on telehealth post COVID-19. Link.
  • Jane Sarasohn-Kahn wrote a good summary of recent reports on the rise of telehealth, including the McKinsey report linked below as well as a Kaufman Hall report that looks at consumers willingness to use telehealth. Provides a nice synopsis of key data from each report. Link.
  • There may be a coming ‘Medicaid enrollment tsunami’ and public health crisis that comes along with that, as millions of Americans lose work and apply for Medicaid. Medicaid spending, which already represents the largest line item on state budgets, is going to be stretched really thin. Link.
  • Fertility startups in Europe have seen a jump in demand for services with COVID-19. Link.

Data:

  • BCBS plans dominate the ACA exchanges - they have almost half of total enrollment in the country, in 11 states they have all or almost all of the enrollees, and in another 9 states they have a majority of the enrollment - according to this data from RWJF on exchange enrollment from 2016 - 2018. It’s interesting to look at the exits of United, Aetna, etc in 2016 and the impact it had on the exchange marketplaces (most people seem to have moved to carriers that traditionally offer Medicaid plans - their enrollment jumped from 15% nationally to 26% nationally). Link.
  • McKinsey thinks that $250 billion of spend could go virtual, with the breakdown provided below. This report does a nice job walking through what health systems should be thinking about at the moment in terms of prioritizing digital care. You know… at one point in time I thought the whole point of spend going virtual was that it would reduce overall spend, not just reallocate it to digital methods. But maybe that’s just me. Link.
  • This is a solid overview of the Medicare Supplement market, which insures over 14 million Americans. UHG dominates the market with 32% share thanks in part to their AARP partnership, while the next largest player is Mutual of Omaha with 10% share. Link.
  • CDC data on emergency department visits showed a 42% reduction in visits in early April due to COVID-19. It’s also seen a pretty significant rebound more recently. Link.